Administration could bypass Congress on Medicaid issues

Washington  Democrats have made it clear: They don't support recommendations from President Bush that would shave an estimated $77 billion from government health programs for seniors and the poor.

But Bush doesn't need lawmakers' support for some of the changes that he wants to make to Medicare and Medicaid. He could get about $23 billion in savings over the next five years by issuing new federal regulations.

Students are among those who could be hit by the regulatory changes.

School districts get reimbursed for arranging speech and physical therapy for Medicaid-eligible students. For example, when a student with autism gets speech therapy, the school can seek reimbursement for scheduling the therapy, confirming it gets done and transporting the student to the therapist, said Mary Kusler of the American Association of School Administrators.

The president's regulatory proposal would eliminate Medicaid reimbursement for those services, she said. The administration estimates the savings at $3.6 billion over five years.

Kusler said students would still get the therapy needed to help them learn - schools have no choice in the matter. However, they may have to cut back other programs to offset the loss of federal funding.

"This would transfer the burden onto local school districts and local taxpayers," Kusler said.

Medicaid is the federal-state partnership that provides health coverage for about 55 million poor people. The federal government will spend more than $200 billion on it this year, while states will spend about $150 billion.

Under the Bush plan, Medicaid cuts also would hit:

¢ Teaching hospitals, $1.8 billion.

¢ Publicly owned hospitals and nursing homes, $5 billion.

¢ Providers of rehabilitation services for the mentally and developmentally disabled, $2.3 billion.

Health care providers acknowledge they may have a much harder time stopping the regulations than they would any bills in Congress.

"Clearly, the president's budget has met with extensive skepticism on Capitol Hill. Clearly, the budget moving forward is highly unlikely," said Tom Nickels of the American Hospital Association. "As a result, initiatives that can be done through regulation are very troublesome."

Health and Human Services Secretary Mike Leavitt referred to the changes during congressional hearings last week as "savers." He notes that Medicare is expected to grow 6.5 percent annually during the next five years, while Medicaid will grow at a 7.3 percent clip. The regulations would barely dent those growth rates.

The regulation on therapy services for students has not yet been issued. Nor has the regulation on graduate medical education. That's not the case with a proposed rule that would affect government-owned hospitals and nursing homes.

Medicaid officials say it's unfair that some states generate extra federal funding without putting up more of their own money. The states make large payments to county-owned hospitals and nursing homes, even as counties are required to return some of the money to the state.

The Bush administration wants to crack down on such transfers by limiting Medicaid reimbursement so that it cannot exceed the cost of providing a particular service. The American Hospital Association says about 1,200 hospitals, mostly in rural or inner-city areas, would be affected.